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The U.S. Supreme Court is dealing with a monumental online sales tax case based on
a decades-old precedent. Does this standard’s tenure make it more difficult to reverse?

Before the end of June, the U.S. Supreme Court is expected to rule in
South Dakota v. Wayfair, the “tax case of the millennium.” But until then, speculation is at play.

South Dakota v. Wayfair is a long-awaited direct challenge to the 1992 decision in
Quill Corp. v. North Dakota.Quill, which states for years have tried to “kill” through lawsuits and legislation, prohibits
states from imposing sales tax collection obligations on vendors lacking an in-state
physical presence.

Quill’s precedent is interesting in part because of it’s lifespan—26 years. In the legal
community, it’s sometimes perceived that precedents become less likely to be taken
up and overturned by the high court after 25 years.

But this concept isn’t widely believed.

“Among certain scholars and litigators, a precedent that has reached a certain age
is considered hard to overturn,” Richard D. Pomp, the Alva P. Loiselle Professor of
Law at the University of Connecticut School of Law, told Bloomberg Tax. “I don’t believe
this for a minute.”

Pomp called the
Quill ruling a “dishonest and politically bankrupt decision.”

“Have we reached a specific period of time where justices can’t overturn
Quill? I don’t think so,” he said.

Not Time, But Societal Changes

Dan Schweitzer, Supreme Court counsel at the National Association of Attorneys General,
told Bloomberg Tax that precedents by no means hold an expiration date.

“There isn’t a magic period of time when a precedent is most ripe to be overturned,
but it’s fair to say that some precedents become harder to overturn with age as they
become more ingrained in our nation’s customs,” Schweitzer said.

Societal changes, not a time span, often play the motive behind a precedent’s reversal,
according to Schweitzer. Changes and advancements in technology, e-commerce, and the
economy could be principle factors in a theoretical reversal of
Quill, he said.

He didn’t single out time as a non-factor, however.

“Other times, it just takes time for a precedent to play out and show that it was
an unworkable rule,” Schweitzer said.

Time as a Factor

Schweitzer cited a handful of past high court opinions.

When discussing the rarity of a precedent’s reversal shortly after it’s establishment,
Schweitzer referenced the 1991 decision in
Payne v. Tennessee—a case surrounding the cruel and unusual punishment clause of the Eight Amendment—which
overturned a law established just two years prior in
South Carolina v. Gathers.

Schweitzer said the scarcity of decisions such as
Payne does illustrate that the court won’t regularly reverse a recently laid down rule.

“The Court doesn’t want to quickly overrule precedents because it would then appear
that the Court is issuing rulings based on particular views of composition of the
Justices,” Schweitzer said.

Affirmed 25 Years Later

And then there are the examples of cases based on precedents over 25 years old which
were affirmed by the court.

Then there’s the 2016 decision in
Fisher v. University of Texas—concerning affirmative action—which challenged the 38-year old landmark ruling in
University of California v. Bakke. The court affirmed the
Bakke decision by a 4-3 majority.

Court More Likely to ‘Double Down’

The high court is much more likely to broaden a precedent, and distinguish it, than
it is to reverse it outright, according to Brian Kirkell, a Washington-based principal
at RSM US LLP.

Kirkell told Bloomberg Tax that a more distinguished version of
Quill is an outcome overlooked by many state and local tax practitioners.

Kirkell said the court could use “dicta"—language in an opinion that isn’t part of
a specific holding, but is authoritative—and a lot of it, in the
Wayfair decision expected later this month.

This means that the court could address issues in the
Wayfair decision that aren’t necessarily a part of the original holding.

Kirkell said the dicta could in part be used to expand
Quill‘s physical presence rule to include “cookie nexus” regulations, which require online
vendors to collect state sales tax if they have property interests in or use in-state
apps and “cookies.” Currently, Massachusetts is the only state that has a cookie nexus regime.

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